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Pm Tells Sarkis: ‘We Won’T Help’ Over Baha Mar

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

PRIME Minister Perry Christie’s office last night effectively told Sarkis Izmirlian he was ‘on his own’ in seeking to reacquire Baha Mar, as it hit out at the “extraordinary statements” attached to his latest offer.

Mr Christie’s office, in a statement, said it felt “compelled” to mount another defence of how the Government had handled the dispute surrounding the $3.5 billion development, and efforts to remobilise the project.

The statement made clear that the Christie administration will not intervene on Mr Izmirlian’s behalf with the China Export-Import Bank, Baha Mar’s secured creditor, and encourage it to listen to his latest offer.

“If, as he states, Mr Izmirlian is in a position to, and wishes to work with, China Export-Import Bank to deliver Baha Mar for the Bahamian people, then he should engage seriously with Perfect Luck and its advisors,” the Prime Minister’s Office said.

“If he is in a position to make a credible proposal to acquire Baha Mar from Perfect Luck, then he is free to do so.”

Perfect Luck Holdings is the special purpose vehicle (SPV) created by the China Export-Import Bank to purchase Baha Mar’s real estate assets out of receivership, which is the first step towards completing the project’s physical construction prior to its sale to the ‘ultimate buyer’.

Meanwhile, the original Baha Mar companies have been placed into full liquidation under the supervision of the Supreme Court and the former provisional liquidators, Bahamian accountant Ed Rahming and his UK colleagues.

Combined, these two developments threaten to cost Mr Izmirlian and his family their total $800-$900 million equity investment in building up the Baha Mar project over the past 13 years.

The Prime Minister’s Office, making clear it was responding to Mr Izmirlian’s decision to ‘go public’ with his latest acquisition offer, said the original developer’s letter/press release “contain some extraordinary statements”.

Although it did not specify what the administration found “extraordinary”, last night’s statement said: “Normally the Government would not respond to such a letter and statement, but so far as it impacts on what the Government has achieved, which is well documented, in ensuring that the Baha Mar development is finished and Bahamian creditors paid, the Government is compelled to” respond.

The Prime Minister’s Office, which again tried to hint at doubts that Mr Izmirlian has the financing to make a credible offer, confirmed that the China Export-Import Bank’s SPV had acquired Baha Mar’s remaining assets.

This will allow Perfect Luck to sell the project “to whomever it wishes”, provided they are “acceptable” to the Government and obtain all the necessary permits and approvals.

Given that the Government has the power to reject any selected purchaser, it does possess the necessary leverage to force the China Export-Import Bank to deal with Mr Izmirlian if it so chooses.

However, the Prime Minister’s Office made clear that the Government has no intention of using this leverage, and therefore Mr Izmirlian’s latest offer - as with those previously - appears to be doomed from the outset.

Tribune Business sources last night said Mr Izmirlian had yet to receive a reply from the China Export-Import Bank or the Bahamian government to his letter, which was addressed to both the former’s vice-chairman, Liu Lange, and Mr Christie.

Some observers are likely to question why the Government is not at least encouraging the China Export-Import Bank to speak to Mr Izmirlian, given that he has promised to beat all rival bids on the Baha Mar acquisition price.

The original developer has also gone beyond the creditor payout compensation offered by the China Export-Import Bank and Perfect Luck by pledging to make all verified Bahamian and expatriate claims against Baha Mar ‘whole’.

However, as Tribune Business previously reported, the Beijing government, and its two entities at the centre of the Baha Mar saga, the bank and China Construction America (CCA), the project’s general contractor, have no wish to deal with Mr Izmirlian and are determined to oust him as the developer.

Any deal with Mr Izmirlian would likely require CCA to be removed from the project, a demand that has always been a ‘no go’ for the Chinese, with protection of the contractor’s interests seemingly paramount throughout the past 18-month saga.

The Christie administration, too, will probably be reluctant to entertain Mr Izmirlian, both because Baha Mar’s fate is largely out of their hands and the project appears to be progressing to remobilisation and construction completion.

The Prime Minister’s Office last night again suggested that Mr Izmirlian had, in effect, betrayed Mr Christie and his government by ‘going behind their back’ over the Chapter 11 bankruptcy protection filing while negotiations were ongoing to save the troubled $3.5 billion project.

“At each stage of the process (which commenced when Baha Mar’s developer, Sarkis Izmirlian, without any prior notice, arranged for the Baha Mar companies to file Chapter 11 bankruptcy proceedings in the United States), Mr Izmirlian has had the opportunity to participate in discussions and the process surrounding the future of the resort,” the statement said.

However, the Prime Minister’s Office made no mention of the fact that the ‘proposed purchaser’ came from outside the sales process run by Baha Mar’s Deloitte & Touche receivers.

The latter were unable to agree satisfactory terms with the ‘preferred bidder’ found by their process, which led Mr Izmirlian to complain in his latest offer about being treated with ‘double standards’.

The original developer said he had been informed “multiple” times that his offers would only be entertained if submitted through the receivers’ process, yet the China Export-Import Bank and receivers had gone outside this to find the purchaser.

Mr Izmirlian had also complained that the sales process structure was designed to prevent him from bidding, as it sought to impose impossible restrictions on speaking to former Baha Mar executives, and could have compromised the $192 million legal claim against the project’s contractor.

The Prime Minister’s Office last night ignored much of this, instead patting itself on the back.

“After much hard work, the project is back on track,” it said. “Re-mobilisation has commenced and, through high level, good faith negotiations, a substantial fund has been established by China Export-Import Bank for the payment of creditors’ claims, and former Baha Mar Bahamian employees are already being paid.

“Those were two of the Prime Minister’s three stated primary objectives, and they have been achieved. The third objective is to ensure that Baha Mar is sold to a world class hotel and casino operator. The Government of the Bahamas will continue to work tirelessly to ensure that this objective is fulfilled, in the very best interest of the economy and the people of the Bahamas,” the Prime Minister’s Office added.

“Real progress is being made and that progress must continue through to the completion and successful operation of the resort by a world class casino and hotel operator.”

Baha Mar has likely been reserved for a Chinese group or consortium to purchase, and the Government will likely press for at least part of the $3.5 billion project - probably the casino and casino hotel, plus the convention centre, Hyatt and the golf course - to be completed and open in time for both the end-winter season and 2017 general election.

Comments

lkalikl 5 months, 1 week ago

F$%^ the PLP and f$%^ our Chinese PM!

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banker 5 months, 1 week ago

Interesting fact that proves that there may have been a plan all along to wrest control from Sarkis. The entity who now legally bought and owns Baha Mar, Perfect Luck Limited is a special purpose vehicle incorporated on the 2nd of October in 2013 in Hong Kong. Now doesn't that beat all! This was planned with a slowdown and Prime Minister Crisco Butt was in on it? Wow! Just too many coincidences. I'm tempted to pay the $22HK dollars to find out the directors of the company, but they might be nominees like Hu Flung Dung, Hung Lo and Ho Lee Foc and Perr Ree Suks.

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Sickened 5 months, 1 week ago

It is also interesting that Perfect Luck (company # 2072340 according to the Guardian) changed its name to JAM Consulting Limited on November 19, 2015 but yet our government is still referring to it as Perfect Luck. How long has this Hong Kong Company owned Baha Mar???

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MonkeeDoo 5 months, 1 week ago

The Jackass doesn't need to, nor should he have, ever become involved in the matter. His job is to enact legislation and leave the courts to deal with such stuff. The problem is that a few of teh PLP vested interests had their fingers in the cookie jar and dis not want the Bahamian people to read it in the New York Times or Wall Street Journal or on the nightly news. So like thieves when the police are at the door they all panicked and yes "GOT INVOLVED". So yes, just stay out of peoples business in this country. The Chinese are here for business so you don't need to cover for them. They are big boys. Christie continually gets himself involved in matters that he shouldn't. Nygard and Simms Point. Blackbeard's Cay. Funny how there always seems to be big money on the table when he is involved.

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MonkeeDoo 5 months, 1 week ago

Banker: I'll pay half of the 22HKD just to know.

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DNewton 5 months, 1 week ago

"the Government will likely press for at least part of the $3.5 billion project - probably the casino and casino hotel, plus the convention centre, Hyatt and the golf course - to be completed and open in time for both the end-winter season and 2017 general election."

This indicates a complete lack of a real understanding of what is involved in opening a project like this. If a management company isn't going to be identified until after the project is complete (or at least several key parts of the project are completed), who will be hiring the staff? You can bring on the Bahamian employees, but you also need a management staff and key positions like specialized chefs and casino marketing staff. Many of these key jobs were filled by ex-pats, who have by now left the Bahamas. Openings are chaotic enough under the best of conditions, but opening a large resort without a management team would continue the disaster that BM has been so far. The more likely result is that the opening continues to be pushed back.

While BM has been a disaster for the Bahamas, it may not work out very well for the Chinese either. The project was going to have a hard time getting to profitability under the best of conditions, and the bad PR and sub-par workmanship the project has had will make it even harder, if not impossible. And other countries and developers are going to see what the Chinese did to Sarkis and the Bahamians and I'm sure will be very hesitant to get in bed with the Chinese on other projects around the world.

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sheeprunner12 5 months, 1 week ago

God will judge Perry harshly for what he has done to our country since 2002 .............. and we the people are feeling a few lashes as well for being so stupid in 2012

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My2cents 5 months, 1 week ago

“If, as he states, Mr Izmirlian is in a position to, and wishes to work with, China Export-Import Bank to deliver Baha Mar for the Bahamian people, then he should engage seriously with Perfect Luck and its advisors,” the Prime Minister’s Office said.

That quote just sounds bad. Why would the PM not want to help in delivering Bahamar for the Bahamian people? Why would/should this be Izmirlian's responsibility alone when the government appeared to do all they could to wrestle it away? I thought after egos simmered they would work with him, I guess it's not important enough.

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SP 5 months, 1 week ago

... PM Christies treating Mr. Izmirlian like he treats all Bahamians. We need not apply! ...

Perry Christie is indeed a wutless jackass. He should be bending over backwards to assist Sarkis, not turning his back on him!

Bahamians are totally ashamed of what Christie did to Sarkis, and we will not forget to return the favor in 2017.

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sheeprunner12 5 months, 1 week ago

Perry cannot allow Bahamar to return to Izzie .......... it will be a political embarrassment after what he has done on behalf of his cronies ......... Bahamar will remain as a faceless asset of the Chinese government owned by a "shell company" that is off limits to the West ....... that will be Perry's legacy as long as we all live and drive pass that obscenely ugly structure

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John 5 months, 1 week ago

The Bahamian government sold out Bah Mar to the Chinese. Izmirilian was forced out because the Chinese dont want him in. They want full control. .

巴哈马政府售罄呸月到中国。 Izmirilian被迫退出,因为中国不希望他来。他们想完全控制。 Bāhāmǎ zhèngfǔ shòu qìng pēi yuè dào zhōngguó. Izmirilian bèi pò tuìchū, yīn wéi zhōngguó bù xīwàng tā lái. Tāmen xiǎng wánquán kòngzhì

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islandlad 5 months, 1 week ago

So, thank Gid somebody finally mentioned the value of the expats. If you don't get them back (and they are all bitter both individually and the corporate entities) there will not be a chance in hell to open the property.

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